Tokenisation should only be used as a funding tool for a specific blockchain-based solution
or product, with the token fulfilling specific functions.

2

Investor protection

Token buyers should be able to understand the features and functionality of the tokens they
buy, as well as challenges and risks of development, benefits of using the issuer’s network
and plans for allocation of raised funds by the project team.

3

Risk management

In the process of tokenisation, operational risks, including cyber security risks, as well as
financial, reputational and regulatory risks should be properly addressed.

4

Record keeping

Token issuers should ensure that information about all transactions and management decisions
is traceable, properly documented, archived and stored in accordance with applicable
legislation and business practices.

Recommended due diligence procedures include ensuring a qualified and professional project
team with relevant competencies, the use of an open and transparent blockchain protocol,
committing to using well-known token standards and undertaking at least one independent
security audit and a thorough analysis of the code and potential bugs before launching a
tokenisation campaign.